INCOME TAX OFFICER, AURANGABAD vs. GORKHANATH GOPINATH LATE, AURANGABAD

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ITA 3055/PUN/2025Status: DisposedITAT Pune26 May 2026AY 2015-169 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, agreeing that the notice under Section 148 issued on April 7, 2022, for AY 2015-16 was barred by limitation. This was based on the Revenue's concession before the Supreme Court that notices issued after April 1, 2021, for AY 2015-16 would be dropped.

What were the facts?

The Revenue appealed against the CIT(A)'s order which quashed reassessment proceedings initiated by issuing a notice under Section 148 on April 7, 2022, for AY 2015-16. The CIT(A) held the notice to be time-barred based on Supreme Court decisions.

What were the issues?

Whether the notice issued under Section 148 for AY 2015-16 was validly issued within the prescribed time limits, considering the amended provisions and the Revenue's concession.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 149,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Shubham N. Rathi
For Respondent: Shri Madhan

आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the Revenue is directed against the order dated 07.10.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”/“NFAC”] pertaining to Assessment Year (“AY”) 2015-16.

2.

Briefly stated, the facts are that the assessee is an individual. He did not file his return of income for AY 2015-16. As per the information available through Insight Portal of the Income Tax Department, it was found that the assessee sold immoveable property amounting to Rs. 10,00,000/- and made time deposit of Rs. 2,72,62,000/- during the relevant financial year, but had failed to file a return of income. Based on this information, the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (the “Act”) and notice u/s 148 of the Act was issued and served upon the assessee on 07.04.2022 after seeking necessary approval of the competent authority. In response to the notice u/s 148 of the Act, the assessee failed to file a valid return. Thereafter, various notices u/s 142(1) of the Act were issued by the Ld.

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Assessing Officer (“AO”) calling for explanations for the above transactions. The assessee, however, failed to respond to the said notice(s) which constrained the Ld.AO to complete the assessment ex-parte determining the total income at Rs. 2,82,62,000/-, thereby making an addition of Rs. 10,00,000/- on account of short term capital gain and Rs. 2,72,62,000/- on account of unexplained time deposit u/s. 69 of the Act, vide order dt. 01.02.2024 passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act.

3.

Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC, relying on the decisions of the Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal [2022] 444 ITR 1 (SC), UOI vs. Rajeev Bansal [2024] 469 ITR 46 (SC) and subsequent decision of the Hon’ble Delhi High Court in the case of Makemytrip India (P.) Ltd. [2025} 173 taxmann.com 497 (Delhi), allowed the appeal of the assessee. The relevant observation and finding of the Ld. CIT(A)/NFAC is reproduced below: “5.5 The facts of the present case are directly covered by the judicial pronouncement above. In this case, notice u/s 148 was issued on 07.04.2022. The case is, therefore, covered by the Supreme Court decisions in the case of Ashish Agarwal (supra) as well as Rajeev Bansal (supra). 5.6 The benefit of TOLA is not available for notices issued for AY 2015-16. The notice in the instant case has been issued on 07.04.2022. Though the criteria for income escaping assessment being more than Rs. 50 lakhs is met, the notice is hit by the first proviso to section 149(1), as the date of issue falls beyond the six year period from the end of the relevant AY. Notice u/s 148 could not have been issued for AY 2015-16 beyond 31/03/2022. Hence the present notice u/s 148 dated 07.04.2022 is hereby quashed, as being beyond the time limit permissible u/s 149(1). As a result, the impugned reassessment proceedings and the impugned order also stand quashed. The addition of Rs. 2,82,62,000/-Short Term Capital Gain is hereby deleted. Since the impugned order falters at the very inception of the proceedings, as the notice is not in accordance with the provisions of section 149(1), no adjudication is required on the merits of the addition made in the impugned order. Further, since the impugned proceedings stand quashed, the remaining grounds of appeal become academic in nature and are not adjudicated upon.”

4.

Dissatisfied, the Revenue is in appeal before the Tribunal raising the following grounds of appeal :

(1) Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has failed to appreciate the fact that in the present case, notice u/s 148 of the Act was issued by AO as per amended provisions of (sections 147 to 151) as per Finance Act, 2021. (2) Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in considering that in the present case, 2 notice u/s 148 of the Act was issued by relying on the provisions of TOLA (Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020). (3) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in relying on the decision of Honble Delhi High Court in the case of

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Makemytrip India (P.) Ltd., (2025) 173 taxmann.com 497 (Delhi) in the present case without appreciating the fact that in the above-mentioned case, notice u/s 3 148 of the Act was issued as per TOLA provisions along with section 147 to 151 of the Act before amendment made in Finance Act, 2021, whereas, in the current re-assessment proceedings have been completed as per the amended provisions of section 147 & 148 of the Act as per Finance Act, 2021 & therefore, said decision is not applicable in the present case. (4) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) failed to appreciate the fact that as per the proviso of section 149(1)(b) of the Act, for the purposes of computing the period of limitation as per this section, the time OR extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A OR the period during which the proceeding under section 148A is stayed by an order OR injunction of any court, shall be excluded. (5) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) failed to appreciate the fact that the notice issued u/s 148 of the Act is well within time limitation as per proviso of section 149(1)(b) of the Act & accordingly, present notice u/s 148 dated 07.04.2022 is valid as per amended provisions of Income Tax Act, 1961. (6) The order of the Assessing Officer may be restored and that of the CIT(A), NFAC, Delhi be vacated. (7) The appellant craves to leave, to add, to amend and/OR to alter any of the ground of appeal if need be.”

5.

Reiterating the contentions raised in various grounds of appeal, the Ld. DR, submitted that the Ld. CIT(A)/NFAC had erred in allowing the appeal of the assessee. He, therefore, submitted that the order of the Ld. CIT(A)/NFAC may be vacated. 6. The Ld. AR, submitted that the Ld. CIT(A)/NFAC has rightly allowed the appeal of the assessee relying on the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal and various other decisions (supra), where in the impugned issue has been decided in favour of the assessee. 7. We have heard the rival arguments made by both the sides, perused the material available on record. We find that the Ld. AO completed the reassessment proceedings, determining the total income of the assessee at Rs. 2,82,62,000/-, thereby making an addition of Rs. 10,00,000/- on account of short term capital gain and Rs. 2,72,62,000/- on account of unexplained time deposit u/s. 69 of the Act, for AY 2015-16 vide his order dated 01.02.2024 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act. We find that the Ld. CIT(A)/NFAC relying on the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal and various other decisions (supra), where in the impugned issue has been decided in favour of the assessee, has decided the issue in favour of the assessee, holding that the notice issued to the assessee u/s.148 of the Act on 07.04.2022 is barred by limitation.

4 ITA No. 3055/PUN/2025, AY 2015-16

8.

The facts of the case are not in dispute. The Ld. AO issued notice u/s 148 of the Act for the relevant AY 2015-16 under consideration on 07.04.2022. Under the old provisions of section 149, which is applicable for the assessment year under consideration i.e. AY 2015-16, the notice u/s 148 would not have been issued beyond the period of 6 years from end of the relevant assessment year. The period of 6 years from the AY 2015-16 lapse on 31.03.2022. As stated earlier, in the instant case, notice u/s 148 was issued to the assessee on 07.04.2022 which is clearly beyond the time limit prescribed under the said provisions of the Act. Although, the Ld. DR has vehemently argued against the legal ground raised by the assessee, we find that the Revenue has also conceded before the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) that the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) is not applicable to the notices issued for AY 2015-16. The relevant para of the judgment is reproduced below : “19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:

a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act;

b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re- assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply “notwithstanding anything contained in the specified Act.” Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act, PART C including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015- 2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:

5 ITA No. 3055/PUN/2025, AY 2015-16

Assessment Within 3 Expiry of Within six Expiry of Year Years Limitation Years Limitation read read with with TOLA for TOLA (or (2) (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not 31-3-2020 30-6-2021 applicable 2014-2015 31-3-2018 TOLA not 31-3-2021 30-6-2021 applicable 2015-2016 31-3-2019 TOLA not 31-3-2022 TOLA not applicable applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable

f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;

g. Section 2 of TOLA defines “specified Act” to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).

9.

Similarly, at para 46 of the order the Hon'ble Supreme Court has observed as under:

“46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the “time limits specified under the provisions of” 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime.”

10.

Finally, the Hon'ble Supreme Court at para 114 of the order has observed as under:

“G. Conclusions 114. In view of the above discussion, we conclude that:

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a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval; f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside;” 11. Recently in the case of Cherian Nallathu Abraham Annamma, order dated 13.10.2025 (supra), the Hon’ble Bombay High Court held as under: “6. We have heard the learned counsel for the parties. It is not in dispute that the present petition relates to A.Y.2015-16. Further, it is also undisputed that the notice under Section 148 has been issued on 5th April 2022 which is at page 52 of the paperbook. Once these are the facts, paragraphs 19 (e) and (f) of the judgment of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) become relevant. They read as under:- 19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:- ....... e. The Finance Act 2021 substitute the old regime for reassessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:

7 ITA No. 3055/PUN/2025, AY 2015-16

Assessment Within 3 Expiry of Within six Expiry of Year Years Limitation Years Limitation read with read with TOLA for (2) TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not 31-3-2020 30-6-2021 applicable 2014-2015 31-3-2018 TOLA not 31-3-2021 30-6-2021 applicable 2015-2016 21-3-2019 TOLA not 31-3-2022 TOLA not applicable applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 21-3-2021 30-6-2021 31-3-2024 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;" (emphasis supplied) 7. From the above it is clear, that the Department has conceded before the Hon'ble Supreme Court that all the notices issued under Section 148 after 1st April 2021 for A.Y.2015-16 have to be dropped. In the present case, the Notice under Section 148 is dated 5th April 2022 and therefore, has to be dropped. 8. The decision in Rajeev Bansal (supra) has been subsequently followed by the Hon'ble Supreme Court in Deepak Steel and Power Limited (supra). Paragraphs 4 and 5 of the said order is reproduced hereunder:- 4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:- "19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020." 5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. (emphasis supplied) 9. Similarly, even in the matter of Nehal Ashit Shah (supra), the Hon'ble Supreme Court, relying upon paragraphs 19 (e) and (f) of the decision in case of Rajeev Bansal (supra), dismissed the SLP filed by the Revenue. Paragraph 5 of the said order is reproduced hereunder:- "5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned."

8 ITA No. 3055/PUN/2025, AY 2015-16

10.

Lastly, this very Bench has on 6th October 2025, in the matter of Spicy Sangria (supra), allowed the petition filed by the Petitioner therein by noting that since, the notice under Section 148 was issued after 1st April 2021, the same was required to be set aside in light of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Rajeev Bansal (supra). 11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued under Section 148 after 1st April 2021. Once this is position, it is appropriate that the notice under Section 148 dated 5th April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered.”

12.

Similar view has been taken by the Hon’ble Bombay High Court in the case of Verjinia Foods Ltd., order dated 06.10.2025 holding as under : “17. Accordingly, we hold that the Notice under Section 148 for A.Y. 2015-16 issued on 5th April 2022 was barred by limitation and ought to have been dropped pursuant to the decision of Hon'ble Supreme Court in the case of UOI v. Rajeev Bansal (supra). We also agree with the submission of both the parties, that the Notice issued on 5th April 2022 under Section 148 is also bad in law in view of the decision of this Court in Hexaware (supra). 18. Since the Notice issued on 5th April 2022[wrongly mentioned as 6th April 2024] under Section 148 was already quashed by order dated 9th May 2024 passed in the above Writ Petition, the consequent order of reassessment dated 3rd March 2025 passed under Section 147 read with Section 144B of the Act, the Notice of Demand dated 3rd March 2025 issued under Section 156 and all the notices proposing to impose penalty under Section 271F, Section 271(1)(b) and Section 271(1)(c) and any order/notice, if any, emanating therefrom are hereby quashed and set aside.” 13. The case of the assessee also finds support from the various decisions of the Mumbai as well as Pune Tribunals, wherein the Tribunal in turn relying upon the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) has decided the impugned issue in favour of the assessee.

14.

In view of the factual matrix of the case and legal position set out above and in the absence of any contrary material/judicial precedent brought on record by the Revenue, we do not find any infirmity in the order of the Ld. CIT(A)/NFAC, which we hereby uphold. The grounds of appeal raised by the Revenue are accordingly dismissed. 15. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 26th May, 2026.

Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 26th May, 2026. TNMM

9 ITA No. 3055/PUN/2025, AY 2015-16

आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “A” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,

सह यक पांजीक र/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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